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Nassau County will pay $26.7 million to Oyster Bay to settle a 15-year-old dispute over incorrect tax assessments in town garbage districts under a deal approved Monday by county lawmakers.

The settlement calls for the county to pay Oyster Bay for tax refunds it made to utility companies in town garbage districts.

In exchange, the town will drop nearly $40 million in claims against Nassau — a figure that includes 9 percent in accrued interest. Oyster Bay will also remit $44 million in property taxes owed to Nassau that was withheld during the dispute.

Legis. Howard Kopel (R-Lawrence) said it was a “travesty” that county law required it to reimburse districts that are forced to refund taxes. “Districts went ahead and taxed something that they shouldn’t have taxed and in the end Nassau County has to pay for it,” Kopel said.

The dispute began in 1994 when the former New York Telephone Company successfully challenged county assessments on its poles, wires and other equipment. Utility companies in town garbage districts filed suit in 2001, arguing successfully that their equipment should not be taxed.

The towns of Hempstead and North Hempstead have a combined $145 million in garbage district refund claims outstanding against Nassau.

The legislature also approved a $295,000 settlement with Randy White, 32, of Roosevelt, whose 2013 arrest led to the resignation of then-Police Commissioner Thomas Dale.

White filed suit in 2014, seeking $46 million in damages, claiming he was falsely imprisoned, subjected to strip searches and served a civil subpoena in police custody in an attempt to coerce his testimony in an election case.

The case arose after Nassau Democrats challenged nominating petitions for former Freeport Mayor Andrew Hardwick to run for county executive as a third-party candidate.

White, a Hardwick campaign worker, testified he was paid per signature, a violation of election law. Hardwick denied the allegation, but his petitions were later thrown out.

Oheka Castle owner Gary Melius, the financial backer of Hardwick’s campaign, told Dale that the campaign wanted to file a perjury charge against White, according to a report by then-District Attorney Kathleen Rice. At the direction of Dale and his commanders, officers pulled White off a bus and arrested him on an unrelated $250 misdemeanor warrant.

Dale resigned and no county officials were charged.

Lawmakers also approved a bill creating a contracting program for service disabled veteran-owned business and sets a goal of awarding six percent of contract dollars to those firms.

There are 208 service disabled veteran-owned firms registered with the state, including eight in Nassau but Mangano said the bill could convince more businesses to register.

Legis. William Gaylor III (R-Lynbrook), an Army veteran, said the program should make a dent in veteran unemployment while Legis. Laura Curran (D-Baldwin) said the law would “boost the economy and stabilize the middle class.”